Latest / The Inspired Stories Podcast / Joe Carter on Private Equity Readiness: Why Valuation Multiplier Range Position Beats Historical Revenue

Transcript

Joe Carter on Private Equity Readiness: Why Valuation Multiplier Range Position Beats Historical Revenue · The Inspired Stories Podcast

0:04
Welcome to another edition of the Inspired Stories podcast,
0:08
where leaders share their experiences so we can learn from
0:11
their successes and be inspired by how they overcome adversity.
0:15
My name is Anthony Kotosbodi and today's guest is Joe Carter,
0:19
founder and CEO of Twin Flame Group.
0:22
This franchise and business consulting firm helps
0:25
entrepreneurs and businesses scale with purpose.
0:29
They specialize in leadership development and strategic growth
0:32
solutions, aiming to unlock unseen opportunities and achieve
0:37
sustainable success. Now, Joe's organization has
0:41
guided over 100 businesses to 10X their revenue thanks to a
0:46
focus on operational efficiency, franchise consulting, and
0:50
data-driven strategies. Under his leadership, they built
0:54
partnerships that generated over $250,000 in community donations
1:00
supporting causes like Goodwill of America.
1:03
Joe has many years of experience in business development, helping
1:06
organizations reach new levels of profitability and social
1:09
impact. His background includes
1:12
designing tailored solutions that ease complex franchising
1:16
hurdles. Twin Flame Group also publishes
1:19
tools and resources to empower leaders.
1:22
Now, before we get into all that good stuff, today's episode is
1:25
brought to you by my company, Add Back Benefits Agency.
1:29
If you run a business, you're likely stuck in the cycle of
1:32
rising insurance premiums and soaring deductibles.
1:35
You're paying more, but your team is getting less, and many
1:38
people can't even afford coverage at all.
1:41
We do things differently. Add Back allows you to provide
1:44
your team with unlimited access to doctors, therapists, and
1:48
prescriptions. That's always free for them to
1:50
access, but here's where you really need to pay attention
1:53
because our program is structured to actually put more
1:56
money back into your company's pockets.
1:59
We recently helped the client increase net profits by $900 per
2:04
employee per year. Results vary, but the
2:07
consultation is free. See if you qualify today at Add
2:11
Back benefits.com. All right, back to our guest
2:14
today, the founder and CEO of Twin Flame Group, Joe Carter.
2:18
Thanks for making the time to Share your story today.
2:20
Thanks Anthony. I appreciate you having me on.
2:22
I've been super excited about this for a while.
2:24
I can't wait to jump into. It, let's do it, roll up our
2:27
sleeves here. So Joe, you've helped over 100
2:30
businesses achieve, we said it in the intro, but it's almost
2:34
hard to believe 10X their revenue.
2:37
Can you walk us through just one example, specific example,
2:41
something that you did, something that you changed,
2:43
strategic shift, operational tweak that helped to yield that
2:47
kind of a dramatic result? Yes, definitely.
2:50
So one particular client of ours was in the oil field services
2:53
industry in the Vernal, UT area. And what they were doing
2:58
previously before coming on board with us was all around
3:01
estimating and it was exceptionally like handshake
3:04
driven and it was you know kind of put your finger in the air
3:07
and and come up with some kind of a number.
3:09
There was really no systemization around it.
3:11
So we were able to look at all of the different specific
3:14
parameters that they previously did that were just kind of gut
3:19
reaction versus data-driven analysis on creating estimates
3:23
and created a consistent way for them to be able to do those
3:27
estimates going forward. After implementation of that
3:30
estimating platform, they were able to increase not only the
3:33
number of estimates that they were able to perform, but
3:36
actually ensure a specific margin for that.
3:39
So they saw a $6 million lift in about a 3 1/2 month timeline
3:44
simply through the execution of that estimating platform.
3:47
Wow, $6 million is significant. Can you give us an idea of from
3:52
what to what was this like from 6,000,000 to 12 million or 100
3:55
million to 106 million? Yeah, definitely.
3:58
So they were doing about 7 and a half million dollars previously.
4:01
So it was almost 100% increase in growth, almost doubled.
4:04
But yeah, and that it's a little over 90 days, about 100 day
4:07
probably time frame from beginning to end, they nearly
4:10
doubled the revenue. Wow.
4:11
And this was oil and gas the industry, right?
4:14
Correct. Yes, Sir.
4:14
And did you have prior experience in that industry or
4:17
was that not necessary for you? A.
4:20
Little bit of experience, but really not necessary in this
4:22
particular regard. Any kind of service based
4:25
industries, there's a lot of very specific consistencies that
4:28
you see from one thing to the next.
4:30
You're just providing a different service.
4:32
So it's just taking some logic that is around that particular
4:35
service driven industry and applying it to what they already
4:37
had in place. And so in this case with this
4:40
specific client, did they come to you knowing that this
4:45
estimation process was their bottleneck, that this was their
4:48
problem? Or did they come to you and just
4:51
say we need help, we don't know where?
4:54
It was pretty much the second, the the latter that they knew
4:56
that they needed assistance, they need help the the business
4:59
had been around for a very long period of time, was in the
5:01
second generation within a family.
5:03
And so the son took it over from the dad.
5:06
The son had been running it for the last like 4 to five years,
5:09
but the 20 plus years of the entirety of the, the company was
5:13
driven by dad and dad's retired now.
5:16
And so while there's a little bit of understanding and
5:18
knowledge, there wasn't as significant as what the company
5:21
had previously established. So they want some outside
5:24
perspective on how do we actually take this to the next
5:26
level because the goal was they wanted to exit that particular
5:30
business at some point in the near future to be able to retire
5:32
themselves. And I'm so they didn't know
5:34
where to start that. And we were able to identify
5:37
that as one of the bottlenecks. There were several others, but
5:39
that was one from a revenue standpoint that they had.
5:42
So how long did it take you to, you know, get your fingers dirty
5:47
and understand? And there were other changes.
5:49
I know we're just focusing on one to understand that, oh, here
5:54
is a significant area of opportunity.
5:57
So to be able to identify specifically the estimating was
6:00
an opportunity was really within just a couple of days.
6:02
Getting to watch how they did two different estimates was like
6:06
a light bulb moment for myself and when I started asking
6:08
questions certainly for the owner as well.
6:11
But in terms of everything that we were looking to improve
6:14
within that particular company, it was roughly about a 3 1/2 to
6:17
four week timeline for us to be able to fully see what they're
6:21
doing that had the opportunity for improvement or growth and
6:24
improvement in efficiency and be able to identify which ones are
6:27
we going to go tackle first, second, third and so on.
6:30
Interesting. OK, I want to dive more into the
6:33
specific examples if we can in a moment, but I want to rewind 1st
6:38
and let's sort of lay the groundwork.
6:40
What were you doing before you started Twin Flame Group?
6:43
Let's lay sort of the foundation for why Joe Carter has the
6:48
experience of the qualifications to help companies through these
6:51
kinds of issues. Yeah, definitely.
6:53
So my career began coming in a traditional corporate footprint.
6:58
I worked for a lot of Fortune 100 companies and very high
7:01
level leadership roles, but I had this urge to become an
7:05
entrepreneur. I thankfully I had the
7:07
opportunity to partner up with a friend of mine and start a
7:10
business in the Dallas Fort Worth metro.
7:12
We were able to pretty quickly scale that particular brand in
7:16
about 2 1/2 to three years. We were able to get to 12 retail
7:19
locations and 10 mobile service ventures as well.
7:23
We were approached by a franchisor who wanted to make
7:25
the Dallas Fort Worth area their kind of home base there and so
7:29
they were able to pay us a fairly high multiple for the
7:31
industry at the time. Took that money and went and
7:35
started my next venture, which was a completely different
7:37
industry and landscaping also got in with kind of a
7:40
partnership group. So we were able to raise a
7:42
significant amount of capital, get that going.
7:45
But we're our goal was to scale it and exit it to a private
7:49
equity firm within about a five year timeline.
7:51
We actually did it in 18 months. I got to stay on with the
7:54
private equity firm for nine months post acquisition as part
7:59
of the transition. But within that, I got to work
8:01
inside of their due diligence department and see over 400 due
8:05
diligence deals totaling more than $14 billion that that
8:08
private equity firm ran through. So I got to see the buyers lens
8:12
and I had certainly been on the seller lens a couple of times.
8:14
So I have this like unique 360° view when it comes to selling a
8:20
business, what they're going to subtract and ultimately what
8:22
they're going to add as well. And I can apply that logic in
8:25
that framework to any business regardless the industry.
8:28
So that's what took me to want to be able to take my past
8:31
experience, create the twin claim group and help the next
8:34
generation of entrepreneurs either scale and exit or just
8:38
scale to improve. That's really cool.
8:41
Take me back to the the landscape example there.
8:45
You guys, the plan was five years, pretty typical, right?
8:49
You know kind of like a four to seven-year timeline is what when
8:52
you know you've got venture money involved where they want
8:54
to see like a return on their capital.
8:56
But you guys did it in 18 months.
8:59
What happened? What were the big levers that
9:01
you pulled that allow for you guys to accelerate that
9:04
timeline? So when we did some analysis in
9:07
the landscaping industry space, what we saw was a dramatic
9:10
difference between kind of your smaller mom and pop landscapers
9:13
that are doing mainly residential and the very big,
9:17
very well known companies that are doing almost exclusively
9:21
commercial. And we saw an opportunity for a
9:23
hybrid between the two where we can provide that one-on-one care
9:27
to a residential customer, but also be able to land those
9:30
larger consumer customers as well.
9:33
So how do we leverage those two ends of the spectrum and be able
9:36
to create something in the middle?
9:38
And we did so by buying out a handful of the smaller mom and
9:42
pops and instituting and implementing several things that
9:45
would allow us to go after those commercial accounts.
9:48
We were able to do that across 9 different services, service
9:52
territory, excuse me, in 6 different states.
9:55
So we're able to acquire some small mom and pops, put some
9:58
institutions in place specifically around estimating
10:01
in order to gain those commercial clients land several
10:04
large consumer, commercial, industrial and even governmental
10:10
customers and clients in that 18 month timeline and PE came
10:13
knocking. So a big part of the unlock
10:16
there is recognizing that the big money's to be made on the
10:18
commercial accounts. You can get a better valuation
10:22
when you're acquiring sort of these small mom and pop shops
10:24
that are doing the residential. The margins aren't there.
10:27
So the valuations aren't there. But knowing what you knew about
10:30
how to go out and get those commercial accounts, now you can
10:34
leverage that with your new acquisitions in those geographic
10:37
markets where they already have a presence and some staff
10:40
etcetera. Exactly.
10:42
You're able to pretty quickly identify how many potential
10:46
customer personas commercial are going to be in a particular
10:49
territory. You already have at least some
10:51
of the infrastructure in place for the team and equipment to be
10:54
able to perform it. You just got to go after it.
10:56
And in most cases, those larger commercial clients, you have to
10:59
wait until their current contract is coming up to to end
11:03
for you to be able to bid against them.
11:04
So being able to identify those individuals 90 days plus in
11:08
advance so that you can be fully prepped and ready to go for when
11:11
it's bidding time for their contract to be renewed.
11:14
So you can take the contract from whoever the current
11:16
provider is and institute it for yourself.
11:19
And how do you determine that? How do you find out who's got
11:22
contracts that are coming up for renewal?
11:25
A lot of it truthfully is kind of what I would call grassroots
11:27
marketing, just going and talking to people, whoever the
11:31
the specific individual is that is running or leading that
11:34
particular commercial account or governmental facility.
11:38
A lot of times it took a lot of door knocks, a lot of phone
11:41
calls, a lot of follow up and emails.
11:42
Sometimes you can do some goodwill searches and at least
11:44
figure out who you need to speak to, but you still have to go
11:47
speak to that individual to be able to find out do they have a
11:50
current provider? When does that current contract
11:52
come up for renewal and what can we do to, to, to be able to bid
11:56
against them in the future? And 99 out of 10 times they were
12:01
coming up for renewal within the next three months or so.
12:04
And so that gave us plenty of opportunity to be able to
12:06
understand what is a current provider doing that they like as
12:09
well as what they're doing that they don't like.
12:12
And how do we close the gap and also be able to kind of at least
12:15
come in close, if not a discount over the current provider so
12:19
that we can gain their business. And then the the next year once
12:22
we've proven the concept to them, if we need you to price
12:25
increase to improve margin and we certainly could.
12:27
Now, interesting. So this is the second example
12:30
where there's something in that estimating that bidding process
12:34
that was a big unlock. Were there commonalities between
12:38
landscaping and the oil and gas client that we just talked
12:42
about? Yes, there, there's a ton of of
12:45
consistency there. While you're providing a
12:47
different service ultimately to your customer, your client, how
12:50
you perform them is exceptionally similar.
12:53
You're going to have labor and you're going to have equipment
12:55
for the most part. And both of those particular
12:57
things, there's going to be materials and people.
13:00
So being able to identify what is your labor margin and what's
13:03
your labor burden more importantly, and what materials,
13:05
if any, and or equipment do you need in order to execute on that
13:09
particular service. Provided that you have a
13:12
specific margin that you're looking to acquire in mind, you
13:16
can add that in at the top end and you understand within a
13:19
fairly reasonable scale what your price point needs to be for
13:22
you to achieve your margin. And then all you have to do is
13:25
go and execute. Labor burden, specifically in an
13:28
estimating world is an estimate. You're guessing.
13:31
So the better you do at that based on past performance, the
13:34
more likely that your estimate will actually come through
13:37
fulfilment. So.
13:40
This is all fascinating stuff, really interesting, the levers
13:43
that you're pulling. Why go and start a consulting
13:45
firm? Is it more profitable for you to
13:48
continue to do the private equity venture capital space
13:52
yourself? But there was something that
13:53
drew you to starting your own firm to help other folks out.
13:56
What was that? So what happened?
13:59
And it's kind of a personal story, if that's OK, but roughly
14:04
7 years ago, my son passed away. And certainly as anyone who's
14:11
ever had to go through something similar to that can understand
14:14
it, it completely reshapes your world.
14:17
I was doing a lot of nationwide travel.
14:20
I was gone fairly consistently as a result of that.
14:23
And I wanted to be able to help other people navigate through
14:27
the mistakes that I had made myself personally within
14:30
business, but be able to do so in a framework that allows me to
14:34
be there for my family and be able to go to the the soccer
14:37
matches and the gymnastics competitions and things like
14:41
that for my kids and my grandkids.
14:43
That was only one of the biggest reasons for me want to start a
14:47
consulting firm so I could help others but more importantly be
14:50
able to help myself and my family.
14:52
Wow, I'm sorry to hear about your son.
14:56
How did you get through that time?
15:00
That's a. That's a difficult question to
15:02
answer. It's a big.
15:02
Question. It's, it's a lot of leaning on
15:07
the Lord above. I'm a very Christian based,
15:10
faith-based individual. So there was, there was a lot of
15:12
that, certainly a lot of tears. My, my wife certainly took it
15:16
much harder than I did as well. So leaning on each other when
15:22
we're having those kind of dark moments for those dark days, so
15:26
that you're a support mechanism built into that.
15:28
But ultimately, after at least the initial grief period
15:32
Exalted, we wanted to be able to find a way to how do we help
15:36
someone else not have to go through that scenario.
15:40
So we've been exceptionally involved in suicide awareness
15:44
and suicide prevention and doing a variety of different walks and
15:47
charity related things to be able to bring awareness.
15:50
That's that's a buzzword that has a negative connotation to
15:53
it. It's, it's the S word.
15:55
It's a new bad S word that's going around there.
15:57
You're almost not allowed to say it in certain networks, but if
16:01
we don't say it, we don't talk about it.
16:03
If we don't talk about it, there's somebody else out there
16:05
that's struggling with it. So I'm perfectly fine talking
16:08
about it, talking about my experience, because I want to
16:11
help someone else not have to feel like that is their only way
16:14
out. There are always things that you
16:16
can do differently, and there's always a way to fix anything.
16:22
So give me an example of one of the conversations that you have
16:26
with folks where you're providing this type of
16:29
encouragement to them. What kinds of things can you
16:31
say? Well, certainly I can empathize
16:35
there. There's sympathy and there's,
16:37
there's empathy, right? And and I can never fully
16:40
sympathize because I'm not necessarily in their shoes, but
16:43
I can pretty strongly empathize with what thoughts they may be
16:46
feeling, what might be going on. But more importantly, I want to
16:50
encourage an individual who may be having that type of mental
16:54
thought or framework inside of the brand going on of understand
16:58
what the people around them, the individuals that actually care
17:01
about them and what the impact would be to their life if they
17:03
chose that route to go. What's going to happen to your
17:07
friends? What's going to happen to your
17:08
brother, your sister, your mom, your dad, your kids, etcetera?
17:11
How is their, you know, life going to be impacted?
17:14
Fast forward in your brain, you're not here five years from
17:17
now. What is your kids doing?
17:18
What are they thinking about? How's it impacted and shaped
17:22
their life over the next five years?
17:23
Because you're no longer present.
17:25
And when you are able to bring them out of their just kind of
17:28
constant internal self driven negativity and place it in a
17:34
framework that's more third party where they're looking at
17:36
it through the vantage point of someone else, then a lot of
17:39
times you can at least help them to get the starting point of
17:44
what I would call growth. But in reality, it's more heal
17:48
than anything else. So that's interesting the the
17:51
way to kind of get them to take that first step in your
17:53
experience often times is to frame it as if you did this,
17:59
here's how it's going to affect the people around you.
18:02
And that many times you've seen has been a little bit of an
18:07
awakening for them to be like, OK, I don't want those things.
18:11
I don't want to put that pain in that situation on those people
18:15
around me. And then once you, I don't know,
18:19
sort of got their attention, maybe there's a better way to
18:21
put that. What have you seen sort of the
18:23
next steps? So the next steps are
18:27
truthfully, it can go one of a couple of different ways.
18:29
There's time periods in which that can almost to a degree
18:32
backfire, where you're already have negative thoughts about
18:37
yourself and I'm forcing you to think about others and what your
18:42
actions going to do to someone else.
18:43
And it can make you feel even worse.
18:45
Oh my God, I can't even believe that I'm potentially going to
18:48
put my family through this. How bad am I?
18:50
And it, it can almost be a spiral downward if we're not
18:54
careful. But what the ultimate real goal
18:57
would be is what is the goal? What is the thing that you want
19:00
your children, your mom, your dad, your brother, your sister,
19:03
whoever it is that is important in life.
19:06
Where do you want them to be within five years?
19:08
And how can you help to support them and give them a goal, give
19:12
them something to go after that is beyond the themselves where
19:16
they have to have attachment, they have to help someone else
19:19
achieve. And in doing so it it lifts them
19:22
up, it provides them with a need, a want, a goal, an
19:26
aspiration, something that they have to do for someone other
19:30
than themself. And what I see more often than
19:33
not is that is the humongous lifting self-confidence because
19:36
you're helping somebody else and it raises your confidence at the
19:38
same time. So it's almost like you're
19:40
getting a double win in that result.
19:43
You're helping them find a purpose outside of themselves.
19:47
100% powerful Joe, what is it that you think?
19:52
Cuz I, you know, I've known people who have experienced the
19:55
loss of a child pain that I hope I never have to experience.
20:01
For some folks, they find a way to work through it.
20:04
They come out the other side and they're able to lead a happy,
20:09
functioning, productive life, never forgetting about.
20:12
You know, never, you know, fully losing the sense of grief, but
20:16
they have the ability to move on.
20:17
And other folks don't seem to have that ability.
20:20
They stay stuck in grief and anger, sort of the two emotions
20:25
that I've traditionally witnessed.
20:27
What is it that you think was different for you and your wife
20:31
that you guys didn't stay stuck in those emotions?
20:35
Yeah, that that's a fantastic question.
20:37
And I truthfully don't think that there's a one-size-fits-all
20:40
answer for that because everybody's different and every
20:42
situation was different. But for us personally, we were
20:46
able to lean on each other and help each other through those
20:49
moments. I know many of people who have
20:52
lost a child and it destroys the marriage.
20:55
It ultimately creates the the path for what likely becomes
20:59
divorce in most cases because they don't know how to help or
21:03
support their partner through the the grief stricken things
21:06
that you're going to go through when that happens in your life.
21:09
So I'm exceptionally blessed that my wife was able to help me
21:13
and that I was able to help her. And I believe more than anything
21:16
else, that and God are the reasons we got out on the other
21:20
side. We still have plenty of moments
21:22
where we get sad, but it's not like we forget or those feelings
21:26
disappear in any way, shape or form.
21:28
But you do find, to use your words, a purpose to continue to
21:32
go on. And if you can find a purpose,
21:34
that's not you. My purpose was my wife.
21:37
I need to help my wife through this, almost ignoring the fact
21:41
that I needed help myself. But through that process, I was
21:44
able to get help from her. But my goal, my purpose was to
21:48
help her. And when that purpose is beyond
21:50
you, you're you're more likely did you just want to get through
21:54
the tough times so that you can deliver upon your purpose.
21:59
Have you kept count of how many conversations you had with
22:02
people where you think maybe you've helped?
22:07
Yeah, I don't, I don't think I could give you a number.
22:10
It's been a lot, to be honest with you.
22:12
Hundreds through the the Suicide Awareness Foundation that we've
22:17
dealt with and and things like that.
22:18
There's been many people that I've had the opportunity to
22:21
speak to. How many have I helped is
22:24
probably a smaller number because truthfully, I can't help
22:28
everybody. I wish I could.
22:30
That would be amazing. But I, I don't have that reach.
22:33
But if I can help one person, that's one person more than
22:37
would have been helped without. So I can I can tell you there's
22:40
there's at least 20 plus individuals who have told me
22:43
personally that as a result of conversations I've had with you,
22:47
I feel better about XYZ. So that that alone is great.
22:52
In my personal opinion, if the number was anything north of one
22:55
I would be super excited. And the number is way north of 1
22:58
so. That's amazing.
23:01
On behalf of those folks and their families and their
23:04
friends, thank you. I mean, how amazing that you
23:08
know, you and your wife were able to turn your own grief
23:11
into, like you said, like a an opportunity for purpose outside
23:16
of yourselves and to help other folks.
23:18
I think that's tremendous. So this this helps to explain
23:24
why you wanted to get off the road, stop travelling, be home
23:29
more and help other folks with the knowledge that you know
23:34
you've acquired through all the different business opportunities
23:37
that you've been a part of. When you decide that you're
23:40
going to start Twin Flame Group, how did you go and get that
23:43
first client? So I wouldn't get that first
23:47
client truthfully through a referral.
23:49
So someone that I had worked with in the past knew someone
23:52
else that was running a a small business and had the opportunity
23:57
or want to try to grow that and prepare for an exit 1 day.
24:03
And having recently exited the private equity space and had
24:06
conversations with that friend, that was a pretty easy kind of
24:09
transition moment of I just literally did this 400 times, I
24:13
can do it for you pretty, pretty simplistically apply models and
24:17
concepts and valuation methods, etcetera.
24:19
So first client came from referral.
24:21
And if I'm honest with the vast majority of our clients today
24:24
come from referrals. Yes, we do marketing, yes, we do
24:26
reach out to webinars, all these sorts of things.
24:28
But I would say about 70% of our clients come from someone else
24:32
that we've worked with previously and been able to help
24:34
that they gave us a testimony to someone else that they know.
24:38
A lot of times entrepreneurs run in entrepreneur circles.
24:40
It's it's crazy. So if as long as you take care
24:43
of the ones you have today, you're probably going to get
24:45
some more later as a result. OK.
24:48
So we've kind of talked around what some of the services you
24:51
that you offer are and the, the big sort of overarching theme
24:56
here seems to be we help you increase your revenue.
24:59
And there can be lots of ways to do that.
25:02
I'm going to assume some of these are cost reductions, some
25:04
of these are sales and marketing techniques.
25:08
Some of them are just finding bottlenecks and breaking through
25:10
inefficiencies. But I'm putting words in your
25:13
mouth. I let's hear from Joe Carter
25:15
himself, what you guys do. For sure.
25:18
So revenue is definitely a piece of the pie, however, or our real
25:22
niche, if you will, is improving the valuation of your company.
25:27
Again, a piece of that is revenue.
25:28
I don't want to ignore that we got to increase revenue for the
25:31
value of your business to go up, but there's a lot of other
25:34
strategies that goes into a business valuation beyond just
25:37
what your revenue has. What type of revenue is it?
25:39
Is it recurring? A month off is a significant
25:42
valuation driver. But beyond that, to your point,
25:44
there's a lot of other things that have nothing to do with
25:47
revenue that ultimately will improve your valuation.
25:50
Certainly expense reduction is a big piece of that, but
25:53
optimization, efficiency, operations of that kind of thing
25:57
is a humongous step forward. If you can reduce your labor
26:00
costs by 2% and you're $1,000,000 company, you just
26:04
increased your valuation by 20% times whatever the even a
26:07
multiplier is for your industry. So we apply that sales,
26:11
marketing, operations, people development, we look at the
26:15
entire gap of everything that would be evaluated on your
26:18
business and identify where your opportunities are.
26:21
Sometimes that's 100 or more things that you could do better.
26:24
We can't fix 100 or more things today.
26:27
What can we fix that's going to give you the biggest return on
26:30
investment and that's the stuff that we're going to go after
26:32
first. So what does a typical
26:35
engagement look like in terms of time period?
26:39
Our typical engagement is between 90 days and six months.
26:42
Just totally depends upon what the particular customer client
26:46
is looking to achieve. If they're looking to sell, AKA
26:49
they've already been, you know, engaged with a buyer, whether
26:53
it's a P firm, a VC firm or or an extra individual buyer
26:56
investment group, they're looking to exit fairly quickly.
26:59
That certainly is 1 and that's going to be a shorter engagement
27:02
because we're trying to accomplish something because we
27:04
already have somebody kind of on the hook, so to speak.
27:07
If it is more operational efficiency so that you can
27:11
improve future operations, it's typically a slightly longer
27:13
engagement, closer to that six month timeline.
27:16
But we do have many clients that we were working with in some of
27:19
the multiple years now because we were able to achieve several
27:22
of the beginning stages and stuff.
27:24
They saw how we work with them and they wanted to continue to
27:27
improve and the other areas as well as scale outside of the
27:31
current geographical footprint for growth.
27:34
So let's talk about that first scenario where the sale is
27:38
coming up very quickly, right? They're already talking with a
27:40
buyer and they they want to boost your client wants to boost
27:45
that valuation before they close that transaction.
27:49
So correct me if I'm wrong. Traditionally evaluation is
27:52
looking, you know, not just at the last, call it three months
27:56
of revenue, it's looking at X number of years going backwards
28:00
and taking an average of that going forward.
28:03
Am I right in in this generally? Speaking traditionally, you're
28:07
looking at at least a three-year kind of past looking perspective
28:12
into financials to understand history and then you're applying
28:15
some similar logic to forward forecast out three, 5 or 10
28:20
years depending upon the type of model or or method that you're
28:23
leveraging. But yes, you're going to
28:24
certainly look backwards. OK.
28:26
And so that forward forecasting in those shorter time frame
28:30
scenarios, I'm guessing is where the recent work that you've
28:35
helped with is really coming into play, right?
28:37
Because let's say that they engage you 3 months, six months
28:41
before a transaction closes, they'll have some months of
28:45
showing improved performance, but you know, it's not going to
28:49
have the impact as if they had, you know, worked with you a
28:52
couple years prior. Am I thinking about this all
28:55
wrong or? No, you're, you're definitely
28:58
thinking about it right. And if you're going to prepare
29:00
for an exit, the sooner you start the better and the longer
29:03
that you have to fix it certainly the better.
29:06
However, there there is a lot of things that come into valuation
29:09
that has nothing to do with what your financials said they were
29:11
six months ago. I can't fix anything that
29:14
happened six months ago. What I can do is fix current
29:17
state and also So what I can fix is how you're evaluated in the
29:20
future state. So traditionally almost all
29:24
industries are going to have an EBIT a range.
29:26
So that range could be whatever, 1 1/2 to 4 1/2 X.
29:31
Well, if that's the industry, your valuation is going to fall
29:35
somewhere in that range. Our goal is to get you to the
29:38
highest possible portion of that range.
29:40
And that has very little, if any to do with historical data.
29:45
It has portions of it, but it's more forecasting related data as
29:48
to where you're going to fall within that range.
29:51
So what is your geographical footprint?
29:53
How strong is your marketing? How good are you at being owner
29:57
independent? Meaning, if I buy your business
29:59
from you today and you leave, does the business fall apart
30:03
before I replace you? If it does, I'm less likely to
30:06
want to pay you an extreme amount of money or a higher end
30:09
of that range because I have to figure out how to replace you.
30:12
If you're already replaced, you could step away and the business
30:15
does not go down in any way, shape or form.
30:17
That is a owner independent business and you're going to get
30:20
a higher into the range. That's just one example.
30:23
And that's, that's, that's a really important piece that I
30:26
was just missing there. My explanation it's because
30:29
let's say you've averaged $1,000,000 in EBITDA over each
30:34
of the last three years. Your work here today in these
30:37
three to six months may not move that $1,000,000 a whole lot.
30:42
It may. But what it's really going to do
30:46
in that short period of time is increase that multiple rather
30:49
than getting that 1 1/2 * 1,000,000 dollars.
30:53
Maybe now I'm at 3 three and a half four because people look at
30:57
it and they're like, oh, and they've got all the systems in
31:00
place. The owner can step out really
31:02
easily and we can just step right in and they're like, yeah,
31:06
you know, now we'll pay a higher multiple on that $1,000,000.
31:10
That's really good and, and all that comes from working inside
31:13
of private equity. When private equity goes after
31:16
an industry, typically they're going to want to acquire
31:19
somewhere between 7:00 and 10:00 businesses within the same
31:22
industry across the country. And ideally, what they like to
31:25
do is buy one of them that's got everything that they want, all
31:29
the systems, all the trainings, all the marketing, all the sales
31:32
techniques, and the other ones that don't have any of it.
31:35
And they want to take the one that's really good and apply it
31:37
to all the other ones. So what they do more often than
31:40
not is the one that's got everything they'll overpay for
31:43
so they can get all that stuff and not have to replicate it
31:45
themselves. And then they basically just
31:47
copy and paste it, underpay all the rest, and then bond them
31:50
together and resell and repurpose it.
31:53
My goal is to help a business become the one that gets
31:55
overpaid because they have all the stuff that PE is going to
31:59
need or want to copy and paste to the other companies that are
32:02
similar to them elsewhere in the country.
32:04
That's really cool. Now a big thing that you guys
32:07
emphasize is scaling with purpose.
32:11
Can you say more about that? Absolutely.
32:14
So people chase revenue. We've talked about revenue a lot
32:18
because a lot of times in business you think revenue is
32:21
going to is the fix all like if I just grow revenue, it's
32:24
better. Well, that's true to a degree.
32:27
But if you scale your revenue, but you lose margin as a result,
32:30
you're scaling. You're not necessarily scaling
32:33
with purpose. You're going to ultimately scale
32:35
yourself out. At some point, there's a kind of
32:39
point of no return where you spent so much more money to gain
32:42
this revenue that you've actually gone backwards and your
32:44
valuation is less than it was before your revenue went up
32:48
because now you're spending more money in marketing or more in
32:51
labor or more in systems or whatever it may be.
32:54
So scaling with purpose where you can protect your margin
32:58
while your business grows in revenue, that is the way to have
33:03
systematic growth that someone else is going to pay a premium
33:06
for. I also know that corporate
33:09
social responsibility plays a big part in your work, and we
33:13
talked about the nearly quarter million or over a quarter
33:16
$1,000,000 in donations that your work has been able to
33:20
contribute to some organizations like Goodwill of America.
33:24
Can you talk about how these community partnerships work and
33:28
why they're mutually beneficial? 100% So Goodwill is one of the
33:32
larger partners that that we have.
33:34
Obviously Goodwill's a very nationwide and reputable brand.
33:38
Pretty much anybody knows who Goodwill is.
33:40
Well, Goodwill helped me out in a time period of my life many,
33:43
many, many years ago when I was struggling through something and
33:47
needed assistance and I never forgot that and always wanted to
33:51
pay it back. And I again am a face driven
33:53
individual. I believe you pay back 10 Volt.
33:56
So that's exactly what I set out to do was how do I pay back 10
33:59
times what I was able to receive.
34:02
And Goodwill was one of those that I wanted to help.
34:04
I wanted our firm to be able to assess.
34:07
So how do we do that? We do that in a variety of
34:08
different ways. Certainly we take donations,
34:11
clothing, food, anything really within the household.
34:15
We will accept donations. We will go pick them up for you
34:18
and deliver them to the local Goodwill Center so that we can
34:21
ensure that those things are helping someone else.
34:24
That is one way in which we do it.
34:26
We also sponsor a variety of different charitable
34:28
organization like walks and telethons and things like that
34:31
that Goodwill puts on. So we will sponsor those in a
34:34
variety of different ways. And a percentage of all of the
34:37
contracts that we have with every single one of our clients,
34:40
1% of that goes to Google. So there's several different
34:43
ways in which we give back to them, as well as a few other
34:45
organizations. And we just try to do it with
34:48
the framework that if we help, if they helped us, we want to
34:51
help them times 10 with the ultimate goal that the next
34:54
person is going to do the same thing and want to pay them back
34:57
tenfold. And it ultimately is a
34:59
multiplying effect that we're able to help so many other
35:01
people. I like that.
35:03
Who's your ideal client, Joe? Geography, Industry size,
35:08
whatever other descriptor is helpful.
35:11
Yeah, Geographically there, there's really could be anywhere
35:14
in the continental and United States or Canada.
35:16
We've had clients in virtually every single state to this
35:19
point. Industry also exceptionally not
35:22
as important because through my work with the private equity
35:25
firm, I got the opportunity to see a variety of different
35:28
industries and really there's more similarities than there are
35:30
differences. In terms of revenue.
35:33
Traditionally 3 to $10 million in annual revenue is kind of a
35:37
prototypical client because that is where your business is small
35:40
enough that you need external help, but also big enough that
35:44
if we move a couple of needles it makes a substantial impact in
35:48
terms of your able to multipliers.
35:50
So kind of three to $10 million, traditionally you're looking at
35:53
somewhere between 20 to 100 employees based upon what type
35:57
of service or product there's they're offering to their
35:59
customer. And ideally it's someone that's
36:02
either wanting to grow and improve their business, whether
36:05
they keep it or not, or looking to exit.
36:07
And exit can be a lot of different things.
36:09
We've talked a lot about selling a business that is certainly an
36:12
exit, but I also have a lot of clients as well navigate and
36:16
exit where they're passing that business on to their next
36:19
generation, their kids, to someone within their family.
36:22
And there's a way to do that. So you set them up for success
36:26
and so that they can continue to drive home the legacy that you
36:30
create. When you're advising business
36:33
owners, entrepreneurs, what are maybe one or two of the more
36:39
common pitfalls that you've seen that you're able to come in and
36:43
help folks repair pretty quickly?
36:46
Truthfully, owner dependency is the most common thing that I see
36:50
in almost every small business. And if you think about it,
36:53
because I've been that individual before, it's almost
36:56
natural. You created a business and it's
36:58
successful. And more than likely you did
37:01
wear almost every, if not every single hat through that entire
37:05
time period. You were the sales guy, you were
37:06
the payroll guy, you were the janitor.
37:08
At some point, because the business was small enough, you
37:11
had to do it right. And so you almost get to a place
37:13
where you feel like I have to keep doing it.
37:17
And without realizing that certain points, if you don't
37:20
allow someone else to do all those things, you're
37:23
bottlenecking your organization. And someone else who wants to
37:26
buy or wants to take over your business understands they have
37:30
to replace you. And there's a cost impact to
37:33
that time, effort and energy. So owner dependency is the most
37:36
common theme. Virtually every single one of my
37:38
clients has got that in some way, shape or form, especially
37:42
the kind of celebrity clients, if you will, where they are the
37:45
salesperson, they feel like they have to go make the sales and
37:48
everything's a handshake deal with them.
37:50
Getting them over that kind of personality quirk where their
37:53
personality is tied to the business is a big piece of it.
37:57
But secondarily is truthfully there's there's a lot of mess
38:01
when it comes to the financials. It's a big thing to be an
38:04
accrual based accounting versus cash based accounting that
38:07
drives in valuation multiplier substantially and most small
38:10
businesses are in a cash based accounting system versus an
38:13
accrual based accounting system. Oh, that's interesting.
38:16
A lot of the businesses that you first come in and consult with
38:18
are on a cash based accounting system.
38:21
Just the way that it started and was easy and it made sense and
38:25
they stuck with it. OK.
38:27
Yeah, they might have ACPA or most of them are running through
38:29
QuickBooks, right. But they, they never really made
38:31
that leap into accrual based accounting and that there's
38:34
several different governmental factors depending upon your
38:37
industry when you have to go accrual and then your CPA will
38:40
navigate you through that. But if you haven't hidden that
38:42
threshold yet, it's really up to you as to whether or not you
38:45
want to be cash or accrual. And truthfully, it's easier to
38:47
be cashed than it is to be accrual.
38:49
So there's a little bit more stuff you have to do within the
38:52
accounting system. If it's accrual based and no CPA
38:55
likes to do that transition, it's it's kind of a big lift.
38:59
So they're not going to volunteer that unless you ask
39:01
them for it, right. But understanding what the
39:04
benefits are specifically in evaluation, if you're trying to
39:07
exit, then maybe we can have a conversation with the CPA and be
39:11
like, I know you don't like to do this and don't want to do
39:14
this, but we really need to do this and here's the why.
39:16
So let's work together to make it happen.
39:18
I wasn't aware of the thresholds.
39:20
What are the thresholds like? Do you do you know off the top
39:22
of your? Head yeah.
39:23
So in service based industries, traditionally somewhere between
39:26
7:00 and $10 million is where the government will require you
39:29
to be a pro based accounting when you submit your tax returns
39:32
for the business. Every you know, restaurants,
39:35
food, et cetera are a little bit side of that.
39:37
I believe it's been 4:00 and 6:00 depending on the state,
39:40
whether or not they have state income taxes as as a result of
39:42
it. So there are some specific time
39:44
periods in which it has to occur.
39:46
More often than that you can request extensions, and your CPA
39:49
probably does that without you even knowing about it because
39:52
they don't want to do it. So they'll just submit the
39:55
extensions and try to kick the can as far down the road as
39:57
possible. But there are some governmental
39:59
influences as to when you need to do it.
40:01
But don't wait for when you have to do it.
40:04
Do it beforehand because truthfully, you'll get paid more
40:06
on the back end. Now that owner dependency issue
40:10
that you're talking about, Yep, I hear about it all the time.
40:13
I've been in that position myself before.
40:16
For those folks who enjoy being in that position, because
40:21
there's different types of entrepreneurs, right?
40:23
Some are, you know, the core of the business and it's hard to
40:27
remove themselves. They want to, they know they
40:28
need to, it's just difficult to do.
40:31
And then there's some folks it sounds like you're running into,
40:34
and I'm certainly seen this before where they don't even
40:36
want to do it right? That how did you put it?
40:38
Sort of the celebrity salesperson, like, you know,
40:41
they enjoy sort of that that role that they play.
40:44
How do you approach these two personas and and coach them
40:49
along? Yeah.
40:52
So depending on which size of the spectrum we're talking about
40:55
there, if it's somebody that wants to but doesn't know how to
40:58
do it, that's slightly easier. So we traditionally will just
41:01
start with them having a blank sheet of paper and a pen and
41:03
they got to care of what them for the next two weeks and
41:06
everything that they do and they're the only one that does
41:08
it. They write it down and we will
41:10
go back to that list and understand what do we, So who do
41:14
we have, excuse me, that we can hand those things off to create
41:18
some kind of an SOP around it, delegate it to an individual and
41:21
then create some accountability steps through it to follow up
41:24
and sure, it's not correct. So it's a little bit easier if
41:26
they want to make the change then if it's something that they
41:29
just thoroughly enjoy. And in those instances in which
41:32
you got the celebrity persona, they like being the salesperson,
41:36
they like being the person that closes all the deals.
41:39
What I have found that works the best is have them look at the
41:43
perspective of your next sale. Is the next salesperson in your
41:49
organization. Make that set, Make that close.
41:52
Make that person be able to close just as much as you do.
41:55
And guess what? You just doubled your sales
41:57
efforts. And if they can get that same
41:59
kind of rise internally because they're able to help someone
42:03
else become that same level of success, it gives them that kind
42:08
of same juice that they saw. And slowly but surely we can
42:11
back them away from it because we have somebody who's doing
42:14
well, but they still have a way to be a celebrity within their
42:17
organization. We just have to change the
42:19
mindset to become a celebrity for your team versus a celebrity
42:23
to your customer. That's interesting, Very clever.
42:26
Do you have experience in the retail industry?
42:30
Yeah. Talk to me about some of the
42:32
curating experiences that you've been able to help develop there
42:35
that have really driven this kind of growth for your
42:38
customers. Yeah, definitely.
42:40
So one of the clients that we had was initially wasn't what I
42:44
would call a traditional retail. So it was a a photography studio
42:49
that had like model shoots and things of that nature that they
42:51
were working on. And what they were doing
42:54
initially was renting out a lot of their kind of wardrobes for
42:59
the models to wear during the shoots.
43:00
And the goal was for them to be able to drive more models and
43:04
they were ultimately trying to sell those to larger agencies.
43:07
That's how they would gain their revenue.
43:09
What I helped them to see was not only from a cost reduction
43:12
perspective, is it pretty costly for you to go rent or buy and
43:16
then like donate or whatever, all of this stuff every single
43:21
season? What if we created a clothing
43:24
brand for you and we found some manufacturers and we find some
43:28
ways for you to be able to have your own clothes, to be able to
43:31
not only market the models, but market your actual clothes
43:34
themselves as well. And we were able to make that
43:36
transition. They now have multiple studios
43:39
in the Dallas, TX area and they have officially launched their
43:42
online retail shop as well where they're selling specifically to
43:47
children from a children's apparel perspective through all
43:50
Four Seasons of of the year. So they've got everything from
43:53
spring and summer to fall and winter on that.
43:56
They've been able to to launch and leverage over almost the
43:58
last year. I think they're on month 10 now
44:00
since they officially launched. So we pivoted them from what
44:05
probably is not traditional retail into a more retail driven
44:08
space. So they were able to save money
44:10
and now they're generating a whole new revenue stream that
44:13
they never had before. So.
44:14
Ten months in, is it too early to tell if this is going to
44:17
work? Maybe to a degree you could say
44:22
it's it's maybe too early to tell.
44:23
However, you can also kind of project out what have we seen,
44:27
We haven't seen all Four Seasons necessary complete themselves,
44:31
but we have seen what type of customers are buying our
44:34
particular product, what type of marketing is working versus not
44:37
working and apply some logic around that to be able to
44:41
forecast in the future. My personal opinion, I think
44:43
it's going to explode, but that is my personal opinion based on
44:47
multiple different amount of data sets that I have.
44:50
And so my understanding on what they're going to be doing in the
44:53
near future. So I it might be a little early,
44:56
but I also think we have enough trends to be able to say within
45:00
a reasonable level certainty there's, there's a lot of growth
45:02
coming. Early indicators are positive is
45:04
what you're saying. And those data sets that you
45:06
have access to, is this data like the that client's sales
45:11
data, like what you're seeing and how it's increasing or is
45:14
there another layer of data that you're kind of putting on top of
45:18
this? So yes, that's certainly one of
45:20
them what their, their customer data lead generation is coming
45:24
through the different marketing efforts that they're doing.
45:26
But also we look at heat mapping on the website as well.
45:29
So we can understand when somebody goes to the website,
45:31
what areas are they spending the most amount of time on?
45:34
Where is the cursor going, what's been clicked within it.
45:36
And we can apply logic behind that to understand that there's
45:39
a way that we can keep them on the website for an extra 5
45:42
seconds and increases your conversion rate by 3 1/2
45:44
percent. What can we do to keep them on
45:46
there for that extra 3 seconds? And then once we get there, what
45:50
else can we do to keep on there for another 3 seconds and
45:52
increase our conversion rate even more?
45:54
So it's just to apply a logic really more than anything else
45:58
to the data that you have to be able to tweak it just a little
46:01
bit to improve it a little bit more.
46:03
And then you just repeat that over and over and over again
46:06
until you get to a degree of optimization.
46:08
So that specific example there, the website optimization that
46:12
you're talking about, Joe, that is a very specific skill set.
46:19
People are, you know, who spend all day, everyday kind of
46:22
working and knowing how to turn those dials.
46:25
Is that a skill set that you guys have internally or do you
46:29
acknowledge that this is something really important?
46:31
And so we're going to bring in our partner who's an expert in
46:35
that area. Love that question.
46:38
So while I would love to say I'm great at everything that that's
46:41
not necessarily true. And there's there's a lot of
46:44
stuff that I believe we are very, very good at here.
46:46
But we also understand that there's some people out there
46:48
that do even better than us. So we have a variety of
46:50
different partners, both from marketing perspective, a sales
46:53
perspective, a finance perspective and specifically in
46:56
the legal world. So attorneys etcetera to be able
47:00
to assist. And we can tap into within our
47:02
network and say we're going to bring this partner in to help
47:04
with this specific thing because A, they can do it better than
47:07
us, and B, they can do it faster than us, and it's going to help
47:09
you achieve it a little faster. Makes a lot of sense.
47:14
What's some other low hanging fruit that we haven't already
47:17
covered Joe that people listening who thinking I've got
47:21
a business, I kind of want to start getting it ready for exit.
47:25
I don't know that I'm quite ready to engage with Joe, but
47:29
what are some of those pieces of framework that they should start
47:34
putting in place sooner rather than later?
47:37
Well, AI is a pretty big topic that's going on right now.
47:40
It seems to be taking over the world, right?
47:42
But understanding the ways in which AI can help your business
47:46
versus replace people within your business is a very big
47:50
differentiator that I see with a lot of small business owners.
47:53
They go to like ChatGPT and just say, create me my next 30 days
47:57
marketing calendar and it's fits back out.
47:59
Whatever chat ChatGPT says is what they go do.
48:03
Well, that's great, but you're completely eliminating the human
48:07
element and there's not a whole lot of data analysis of past
48:11
performance in there either. So being able to pull your
48:14
social media accounts and see number of viewers, number of
48:17
subscribers in the comments, forwards, likes, reposts,
48:20
etcetera, and leveraging that into an AI tool such as ChatGPT
48:25
or others and give it the data to be able to give you an even
48:29
more informed response. That's how you leverage AI
48:32
versus just allow AI to take a. Yeah, I'm glad that you brought
48:36
up AI. Can you talk more about how
48:40
you're seeing this come into play in your line of work,
48:43
whether it's how you guys are using it inside of Twin Flame or
48:48
how it is that you're seeing your clients use it in an
48:52
intelligent way that actually contributes to their overall
48:55
valuation? Yeah, definitely.
48:58
So ways that we use it and leverage it within the twin
49:01
flame group, we we definitely leverage a lot for data
49:04
analysis, specifically in business valuation.
49:06
So we've been able to create several different GBTS kind of
49:10
internally that we have put in all of our kind of private
49:13
equity experience and all the other clients that we've had.
49:16
So that we can then throw in a new client's information and
49:19
have it apply that same logic back to us faster than we would
49:22
be able to do on our own. So that's one way in which we're
49:25
utilizing or leveraging it, but we're setting it up to be
49:28
successful 1st and certainly testing it to ensure that it
49:32
it's done accurately or correctly.
49:33
And then in terms of my clients, what I've seen the biggest level
49:37
of improvement and is kind of in the sales aspect of several of
49:41
my service based clients where they have leveraged AAI tool to
49:45
be able to generate an improvement around sales
49:48
techniques, how they overcome objections, be able to do role
49:52
plays with their salespeople. We actually created an app where
49:56
it's a GB T. So you're talking to a computer,
49:58
right? But you're pretending that it's
50:00
a customer and you're asking it questions or an offer and that's
50:04
responding back to you and it's giving a live role play.
50:07
Role play is the biggest thing that will improve a salesperson.
50:11
And role play is something that in today's world is almost
50:14
completely going away. And yet it's the thing that's
50:16
going to skill set development more than anything else.
50:20
So if we can utilize or leverage AI to replace or at least kind
50:25
of fill in the gap, so to speak of the role pay aspect for sales
50:28
development, then we're able to continue to grow where we can
50:32
leverage marking to bring in more leads.
50:33
But we have that salesperson vehicle.
50:36
That's really interesting. So this GPT that you guys have
50:40
built sounds like what happens is you're feeding the client
50:46
data into it. Here's what the client does.
50:48
Maybe he hears even the sales script that they use.
50:51
And then there's another piece of data that's coming in that
50:54
says here's some, you know, FAQ, some common objections,
50:58
etcetera. So the AI has some understanding
51:01
of kind of the typical back and forth that takes place.
51:04
And then what is the actual interaction with that GPT look
51:09
like from a training perspective?
51:10
Is somebody it like, is this the audio version?
51:13
We're like I'm talking and then it talks back to me or is it
51:17
giving me a text version and then I'm sort of typing my
51:20
response? So one point I was kind of the
51:23
text version, which could either be on a mobile device or on a
51:26
laptop. So you're pretending like you're
51:29
calling, you know, a potential lead, right?
51:31
And but you're just doing it via quote UN quote text versus a
51:35
physical number. Once we are able to vet through
51:37
that that's function correctly, then we do call in particular AI
51:41
voices so that you can actually have sales or live sales role
51:45
play calls with a computer based AI model.
51:48
So you're able to get a little bit more of a verbal dialogue
51:51
back and forth. But at least the 1.0 version
51:53
when we create for our clients is kind of a text based system.
51:57
That's a great place to start, yeah.
51:58
And then you you already have visions of where this is going
52:01
to move to next and just continues to become even more
52:04
powerful. 100%. Joe, how would you characterize
52:10
your superpower? That's a good question.
52:15
My superpower is what I would call the ability to see the
52:20
future. So I'm able, thanks to a lot of
52:24
experience and having done this a lot of times, understand how
52:28
to properly forecast a business of where it will be not
52:31
tomorrow, but where it will be 3 years, five years and 10 years
52:34
from now. Based on demographical data,
52:38
historical performance, the understanding of what's
52:40
happening within the economy and what is going on within that
52:44
particular business and applying growth patterns and strategies
52:48
to be able to predict the future.
52:50
So that's my my superpower, the ability to predict the future.
52:53
I like it. So let's tap into that
52:56
superpower. What does the future hold for
52:58
Twin Flame Group? What's coming next?
53:00
So the the future for the Twin Flame Group is we're going to
53:03
have helped over 1000 clients by the end of 2030 be able to
53:08
successfully increase their EBIT by a minimum of double, the goal
53:13
is triple, but a minimum of double their EBIT evaluation
53:16
within six months of contract initiation.
53:20
Wow, that's, that's quite a goal.
53:24
I mean, that's a quick time period.
53:26
You gave us one example where you were able to do that for the
53:28
oil and gas company. I presume that was a bit more of
53:33
an outlier to get double growth in that time frame.
53:38
I don't know that's that's pretty aggressive.
53:42
You would think it's aggressive and from the outside looking in
53:45
it it it certainly sounds aggressive.
53:47
However, when you understand that all industries have got a
53:50
range and almost every one of our clients when we meet them
53:54
are on the lower end of that range because they don't have
53:57
many of the things in place that a private equity or venture
54:00
capitalist form is going to want to look for to pay the higher
54:03
premium multipliers. And if we just close those gaps,
54:06
double is actually a small goal. It's a small increase if I'm
54:11
honest with you. And you know where I'm tripping
54:13
up again is and you say double evaluation in my mind, I'm
54:16
thinking double the revenue. And I, I made that mistake
54:19
earlier in our conversation. Certainly you're looking to
54:22
increase the revenue, but that's not the only thing that goes
54:25
into the valuation. It's improving all those other
54:27
systems and processes so that you can go from the 1 1/2 X to
54:31
the 3X, right? Correct.
54:36
Good lesson for me to be re reminded of within the past 30
54:40
minutes of my own interview. I love it.
54:42
Hopefully other people are embracing that that lesson as
54:45
well. So.
54:47
If you had to recommend one resource for folks who are
54:52
interested in improving their business valuations, a book, a
54:56
course, podcast, where would you direct them?
55:01
So I, I would direct them to a couple of different places.
55:04
First and foremost, within our website, you can fill out basic
55:08
information and get a free private equity readiness
55:11
checklist and 90 day scale point.
55:14
So it's free resource. You can just put in some basic
55:17
level information and download it and then you're going to
55:19
apply it and do it do it yourself.
55:22
And that is a great starting point for a lot of people to
55:25
just understand where is my business at today and what could
55:28
it be later? Then if you want help, cool,
55:30
we're here. If not, you want to just kind of
55:32
run with it or throw in the trash that that's that's
55:35
ultimately up to you. And then in terms of a podcast,
55:38
I have two. So I have the franchise pro
55:41
show, which specifically focuses in the franchise space, and the
55:44
lead managed Thrive podcast, which is non franchise
55:47
entrepreneurship. So check those two out.
55:49
They're all about founders who have created businesses that are
55:52
scaling value, not just scaling revenue.
55:55
OK, so the website twinflametx.com TX is for Texas,
56:01
yes, OK, Twin flametx.com where you can get that business
56:06
valuation assistance there and then the other resources, how do
56:10
folks find those the the podcast that you're?
56:13
Referencing the podcast, so we are on YouTube, Apple, Spotify
56:17
and then we also put them on our website as well.
56:19
So check your local podcast platform.
56:22
OK. And if they go to the Twin
56:24
flametx.com website, they'll see the podcasts on there as well.
56:30
So if you're going to remember one thing from today's
56:33
conversation, one resource, you're going to go to
56:36
twinflametx.com. And I see it right there in the
56:40
main menu podcast is one of the options services about Yep,
56:45
everything's there, folks. Twin flametx.com.
56:49
OK, what's something fun that you like to do outside of work?
56:55
Oh, that's a good one. So I I got a 1994 Chevy
56:59
Corvette. It was, it was my son and I's
57:02
car. We like to tinker with it.
57:04
So when I'm not working, one of my favorite things to do online
57:08
and get away is my wife and I go on and drive.
57:11
So we're in, we're in Texas, I-35 is the main Interstate.
57:15
We will drive it all the way up to the Oklahoma border
57:17
tournament and come on back. So it's typically about an hour,
57:20
hour and a half during on traffic, but it's getting away
57:23
from it all. Like the I'll have my phone with
57:26
me, but it's awful hard to hear it when the top's down and
57:29
you're going 90 miles an hour. So it's a way to just get away
57:32
from it, be able to kind of reconnect a little bit with, you
57:36
know, our son who's no longer with us.
57:38
But do so in a way that puts a smile on her face versus a way
57:41
that maybe brings us down and makes us sad.
57:44
I like that. How about some daily practices
57:46
or habits, Joe, that either help you get your day started or keep
57:51
you on track and keep you centered?
57:54
Yeah, so I'm probably a different personality than most.
57:58
I know a lot of people out there like to get up and either read,
58:00
stretch, workout or something like that in the morning.
58:03
I'm like the opposite of that. I need to kind of unwind at the
58:07
end of the day just because I'm naturally ADHD.
58:10
So what I will do personally for myself is I spent about 30
58:14
minutes reading every night before bed.
58:16
So I have a very specific time I want to go to bed every night,
58:19
rewind 30 minutes and I spend that time reading.
58:22
And my favorite book to read is the Bible, so will find a
58:25
different chapter and read a handful of scriptures, make some
58:29
notes around it. And that helps my brain to slow
58:32
down, unwind, get a proper amount of rest for that evening
58:35
so that the next day I'm ready to be the best person that I can
58:38
be for myself, my family and the clients.
58:42
When you open up the Bible, are there a handful of chapters that
58:45
are your favorites that are your kind of your go TOS?
58:48
Or do you just kind of flip it open and wherever the thumb
58:52
stops the page, that's where you feel called to jump in?
58:56
Yeah, well, I mean, there's there's certainly chapters that
59:00
I like to go to or my go to more than anything else.
59:02
Joe's and Psalms are, are definitely the probably the top
59:06
2, but there's, there's many times that I'll just, I'll open
59:09
it up, like just kind of just actually physically open it and
59:13
see what page it falls to. Because I believe there's a
59:16
reason for everything. And that if my finger just
59:20
happened to touch a particular page when I open that, that's
59:24
probably the page the guy wants me to read today for some
59:26
reason. So there there's more often than
59:29
not a time period where I'm going to a book that I didn't
59:32
walk in the room anticipating to read, but just allowed, you
59:36
know, the Holy Spirit to guide me and what I do need to be
59:38
reading for that particular. Day.
59:41
So in my experience, sometimes our mistakes end up becoming our
59:45
greatest teachers. Is there an early career moment
59:49
for you that seemed like a set back but actually propelled you
59:53
forward? Yes.
59:57
So my first business that that we started that there was a lot
1:00:02
of success. I referenced that earlier on in
1:00:03
the podcast. But when we sold, I thought it
1:00:06
was when we sold for what I thought was a pretty good amount
1:00:10
of money to the franchisor. I found out later it wasn't.
1:00:14
I found out later that I left $2,000,000 on the table so.
1:00:19
How did that, how that happened? Well, there's a lot of stuff
1:00:22
from a systemization and operations and an owner
1:00:25
replacement perspective. I was the guy running everything
1:00:28
and doing everything. So I got dinged a little bit for
1:00:31
that. And so it's a $2,000,000
1:00:34
mistake. There's a webinar that I put on
1:00:35
early in the year called The $2,000,000 Mistake where I
1:00:38
walked through step by step all of those things that identified
1:00:42
and ultimately created a $2,000,000 gap and what I do to
1:00:46
help my clients not have the same $2,000,000 mistake.
1:00:50
You know, and I'm glad that you mentioned franchise because you
1:00:53
don't you work with all kinds of businesses, but you've done a
1:00:56
lot of work in the franchise space.
1:00:58
Can you talk more specifically about that?
1:01:02
Yeah, definitely. So my first business was
1:01:04
ultimately got sold and became a franchise.
1:01:07
But I've worked with several different franchise brands
1:01:09
either as a franchise on franchise or side where I did
1:01:13
sales, marketing and operation support as a consultant for
1:01:16
them. And then today I help
1:01:18
individuals who want to become an entrepreneur explore the path
1:01:22
of entrepreneurship through the lens of franchising.
1:01:25
So within our network, we have almost 1000 different franchise
1:01:28
brands that we represent and support throughout the US and
1:01:32
Mexico and several countries in in Europe as well.
1:01:35
So a plethora is the short way to to answer that question.
1:01:40
But it's franchise. There's a lot of positives to
1:01:43
it. Truthfully, there's a lot of
1:01:44
negatives too, and not every franchise, even the ones you
1:01:48
know about, Chick-fil-A or Starbucks, whatever, Like
1:01:51
they're great brands, but that doesn't mean it's a great fit
1:01:54
for one specific individual. And my goal is to help find the
1:01:58
right fit, whether that fit is Starbucks or Chick-fil-A or is
1:02:02
someone else that just has a better alignment with what
1:02:05
they're attempting to accomplish from a financial perspective and
1:02:08
involvement perspective, geographical perspective,
1:02:11
whatever it may be, and help them navigate and find the right
1:02:14
fit for them. Yeah, I.
1:02:15
Think that. So I've just got one more
1:02:18
question for you today. But before I ask that, I want to
1:02:20
knock out three quick things. First of all, we touched on this
1:02:24
before, but anybody who wants to get in touch with Joe Carter
1:02:27
from Twin Flame Group, go to twinflametx.com.
1:02:31
The TX is for Texas. You can.
1:02:33
We're also going to put his LinkedIn profile and the show
1:02:36
Nuts for folks so you can check that out.
1:02:38
But if you look up Joseph Carter Twin Flame Group on LinkedIn,
1:02:41
you'll find himtwinflametx.com. Also, as a reminder, if you want
1:02:45
to get more employees, access to therapists, doctors, and
1:02:48
prescription meds that, as paradoxical as it seems,
1:02:52
actually puts more money into the company's pocket, reach out
1:02:55
to us at adbackbenefits.com. Finally, if you're enjoying the
1:02:59
show, a quick comment or review on your favorite podcast app
1:03:03
goes a long way towards helping others discover our show.
1:03:07
So thank you in advance. So last question, Joe Carter, a
1:03:11
year from now, you and I reconnect and you're celebrating
1:03:14
something big. What's that big thing, that
1:03:16
specific thing that you hope to be celebrating one year from
1:03:19
today? So I don't hope for anything
1:03:23
because I believe hope is just a replacement of something that
1:03:26
you wish for. And I don't wish for anything.
1:03:29
I I set goals and I execute and achieve goals.
1:03:32
So a year from now when we do reconnect, the thing that we
1:03:35
will be celebrating is we will have helped our 100th individual
1:03:41
become an entrepreneur through the true franchise ownership and
1:03:45
we will also be celebrating our 350th small business that we
1:03:50
helped to increase their valuation by at least double if
1:03:54
not true. Love it.
1:03:55
Thank you for reframing that. Joe Carter from Twin Flame
1:03:59
Group. I want to be the first to thank
1:04:01
you for sharing both your time and your story with us today.
1:04:03
I really appreciate. You thank you, Anthony.
1:04:06
I was this was a pleasure. I love being on.
1:04:09
Folks, that's a wrap on another episode of the Inspired Stories
1:04:12
podcast. Thanks for learning with us
1:04:13
today.